Right now, the logistics industry is in a unique position. A variety of new and innovative ideas and digital technologies are completely changing the face of logistics. However, that also means that those working in logistics need to adapt and do it quickly to keep up with competitors.
You may be familiar with FreightTech, but you might not realize that the traditional players in logistics have been slow to adapt to it. This has created an easy way for new companies to jump in and see success simply by being willing to take risks.
This article will look at FreightTech and what is holding companies back from its adoption. We’ll also delve into how those longstanding organizations can take back their dominance over the market.
The Rise of FreightTech
One of the reasons that many logistics companies are wary of working with new technology may come down to the fact that the logistics value chain has been the same for several decades.
The basic process is that a freight forwarder will receive an order. Next, the package has to be picked up. Next, it’s placed in a warehouse before being transported to a new location, where it goes into another warehouse. Eventually, the package is delivered to the person who ordered it.
However, the last few years have been excellent for innovative ideas and technologies in logistics, something that has become known as FreightTech. This has completely changed the logistics path that established companies were comfortable with.
Not only that but it’s expected that in the next two to five years, FreightTech applications will have disrupted every single step in the traditional logistics value chain.
The Dilemma for Traditional Logistics Organizations
The companies who have spent years or decades relying on things being the same are now in a position where that simply isn’t true. The only option is to adapt. Otherwise, these organizations could see their prime spots taken over by new companies.
The new logistics companies aren’t focusing on the way things used to be done. Instead, they’re happy to jump into the new world of logistics and have access to the major funding needed to invest in new technologies. One look at Amazon gives you an idea of what we’re talking about.
On the other hand, FreightTech isn’t so established and these companies aren’t so ingrained in the landscape that traditional organizations can’t take action.
Understanding the developers of FreightTech, the challenges traditional companies face implementing it, and how an ecosystem-based approach works can move logistics companies over the hurdles.
The Top Developments in FreightTech
When we’re looking at FreightTech applications, they typically fall into one of three categories. These include automation, intelligence, and integration.
- Automation – The use of robotics systems in logistics is a part of FreightTech. This is done to increase productivity levels since robots now have longer lives and are dropping in price. However, most automation applications are largely concerned with reducing manual tasks that traditional workers currently have to do.
- Intelligence – The network-based and complex nature of logistics has created a bevy of opportunities for making data-driven decisions and optimization. Because of that, FreightTech applications based on intelligence include tools that transfer, create, and analyze data in a better way.
- Integration – The platform model is becoming increasingly popular in the logistics world. However, there is an issue when it comes to integrating several stakeholders. The FreightTech applications at this level focus on increasing communication and transparency between different players by utilizing digital processes.
The Status of Automation, Integration, and Intelligence on Logistics Markets
In most cases, companies across the logistics industry are focusing on the use of FreightTech options that involve platform models. However, it’s also a priority for them to support service providers who provide solutions that aid digitization.
However, most of the funding coming from investors is being used on intelligence applications, such as artificial intelligence tools.
Challenges When Implementing FreightTech
There are many challenges related to implementing FreightTech. For instance, the European market is more fragmented than other locations. It also is more international and less standardized than other places.
Logistics companies that have been in the game for a long time also have their own set of challenges, many of which can prevent the scaling of FreightTech solutions. However, at the same time, the new and innovative companies see increasingly lowered entry barriers.
As an example, there is a huge investment in digitization, while there may be a lack of trust between stakeholders concerning data sharing.
This leads to a situation where e-commerce businesses and start-ups are currently changing the face of logistics. We mentioned Amazon earlier, which is known for transforming itself into a full-service logistics company that competes with traditional businesses.
Options To Adapt
The value chain that has been in place for decades will eventually be gone. Instead, ecosystems, including the organizational networks involved in transporting goods through the full supply chain, will become the heart of logistics.
To fully benefit from the opportunities associated with FreightTech, those who haven’t made changes will need to have knowledge of the ecosystem and be willing to change business models to handle the challenges and hurdles associated with fluctuating market dynamics.
Everything from developing data ownership to leveraging ecosystem options and identifying the most relevant technology can create better value from instituting FreightTech solutions.
The idea is to help traditional logistics companies maximize their market share and price level while supporting growth opportunities and raising cost efficiencies using innovative technology.
Where Logistics Can Go From Here
FreightTech is here and it’s likely going to stay. All three of the categories are creating a shift toward an integrated logistics ecosystem where containers and parcels can optimize routing all on their own.
The new ecosystem will also need new players to work now and in the future. These are likely to include network specialists, aggregating meta-platforms, next-generation asset operators, and integrating logistics platforms.
What logistics companies need to decide is what their role will be in this new world. Only the companies that can rise and handle the changes are likely to be names that we know about in the future.